According to the Equipment Leasing and Finance Association (ELFA), U.S. companies borrowed 8% less to finance equipment investments in October compared to a year ago. Some businesses felt the impact of high interest rates, which are causing a softness in credit quality and slight increases in delinquencies, according to ELFA CEO Ralph Petta. This is consistent with the economic environment and market turmoil resulting from quantitative tightening, inflation, employment, and supply chain disruption.
Despite a set of sound metrics in the U.S. economy, participants report these challenges as some businesses are constrained by reports of a pull-back in bank lending at least in certain sectors. ELFA reports on the economic activity for the nearly $1-trillion equipment finance sector and surveys banks like Bank of America and financing affiliates of equipment makers.
U.S. companies signed up for $10.4 billion worth of new loans, leases and lines of credit in October, up from $9.7 billion a month ago, ELFA said. Credit approvals also improved month-on-month, touching 76% in October, up from 73.6% in September